Question

The present value of the following cash flow stream is $5,933.86 when discounted at 11 percent...

The present value of the following cash flow stream is $5,933.86 when discounted at 11 percent annually. What is the value of the missing cash flow? (Please show work)

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Answer #1

we can calculate the cash flow using the PMT function in Excel with these inputs :

  • rate = 11%
  • nper = 10. In the question, the number of years is not given. let us assume this to be 10 years.
  • pv = 5933.86

PMT, or the annual cash flow (assuming 10 year period) = $1007.58

PMT, or the annual cash flow (assuming 15 year period) = $825.19

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